Why do the big companies keep making the same old mistakes? Is it because, as scions of old media, they are all stuck with a broadcast philosophy that assumes bigger is always better? Is it because their leaders aren't Web users themselves and so never catch on to how people actually use the medium? Is it because they are so dazzled by meaningless Media Metrix numbers that they try to boost their ratings by pooling their properties into single domains -- even if that makes no sense to users?

Maybe. But these days I think every wannabe portal executive has the same thing in mind: They've all got AOL envy.

America Online -- 17 million users and growing! All captive targets for a ceaseless barrage of pop-up ads! Never mind that probably a third of those users signed up just to get an e-mail address and rarely do anything else with their accounts -- and another third joined up to chat. To media execs, 17 million is a number to sink your teeth into -- the kind of number that Pathfinder's founders once dreamed of, and Go's creators plainly yearn for.

There's one little problem: 17 million people have joined AOL not because of the sterling reputation of AOL's content or the rich array of its services; if quality of content or "community" or even e-commerce were the deciding factor, AOL would be an also-ran. Millions keep joining AOL because, for the large proportion of the U.S. population that does not relish wrestling with computers, AOL has the reputation of being the simplest path to an online connection.

AOL's allure, in other words, is that it is an Internet service provider with no-brainer access to e-mail and the Web that no one else has been able to compete with. And owning the user's connection to the Net is what has made AOL a Wall Street darling. Its users are captives and its services are "sticky" in ways that Go and Lycos and Yahoo and Pathfinder can never match -- unless they decide to invest in building vast proprietary networks and phalanxes of dialup modems.

Time Warner isn't investing in old-fashioned modems, but it does own a cable modem service called RoadRunner. And today the cable companies' efforts in the "broadband" cable modem market are all aimed at establishing an AOL-like relationship with Net users -- to supply both the connection and the content.

What AOL is afraid of is that something like Pathfinder sitting on top of a high-speed cable Internet service like RoadRunner -- or Excite sitting on top of AT&T/TCI's @Home -- will steal its future by duplicating its model. Which is why AOL is currently engaged in a fierce lobbying campaign to force the cable companies to allow competing services -- like AOL -- to use their high-speed wires under "common carrier" type rules.

AOL is now squaring off chiefly against AT&T, which owns cable giant TCI and is about to buy another big cable outfit, MediaOne -- which happens to own a chunk of RoadRunner. The MediaOne deal could turn AT&T into the dominant player in the Internet-by-cable industry, and AOL doesn't want to get locked out.

It's the kind of battle in which neither side deserves much sympathy. On the one hand, competition is good, and AOL is right to want to break any incipient cable monopoly. But all the cable people are doing is playing AOL's own monopolistic game, saying, "We're the service provider -- we set the rules." After all, if you've got a cable-modem account, you can still access AOL -- at its Web portal, www.aol.com, on the open Web. You're just not going to be giving AOL your credit card number or visiting its proprietary areas.

Here's what I think a fair outcome would look like: AOL ought to win its battle and earn the right to provide Internet services over AT&T's cable lines. Then it's only fair to turn the tables and demand that AOL open up its proprietary service. If the cable companies are going to be treated as "common carriers," let's treat AOL as one, too. In the Net era, it's not ownership of wires that makes a company a public resource and forces it to take on public responsibilities -- it's ownership of credit card numbers and markets and minds.

Under such rules, AOL would have to allow competing portal providers to offer their services to AOL customers in AOL's proprietary network areas. Gee, maybe there's a future for Pathfinder after all!
salon.com | May 4, 1999

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